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Governing boards key to enhancing Tax-to-GDP ratios in emerging economies, study finds

by The Sikaman Times
July 3, 2025
Dr. Dr. Frank Yao Gbadago

The author, Dr. Dr. Frank Yao Gbadago

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A new practitioner article published in the African Journal of Economic and Management Studies argues that strengthening the composition and independence of governing boards of tax authorities is critical to improving tax revenue mobilization in emerging economies.

Authored by Dr. Dr. Frank Yao Gbadago of Akenten Appiah-Menka University of Skills Training and Entrepreneurial Development, the study explores the link between tax authority governance and tax-to-GDP ratio performance, a key indicator of a country’s ability to fund public services and development initiatives.

“Appointing governing boards with requisite expertise, balanced composition and diversity not only enhances board independence but significantly impacts tax collection outcomes,” Dr. Dr. Gbadago states.

The paper draws on comparative international data and case studies from across Africa and beyond to argue that countries with politically independent, professionally qualified and diverse tax boards consistently achieve stronger tax-to-GDP ratios. For example, Sweden and Germany exceed 40%, while countries like Nigeria remain below 10%, partly due to politically appointed boards lacking the requisite expertise.

In Ghana, the tax-to-GDP ratio was 14% in 2024. The newly appointed Finance Minister, Hon. Cassiel Ato Forson, aims to raise it to 16% amid growing concerns over tax evasion and leakages. The paper identifies governance reforms as a critical path toward reaching such targets.

One major concern highlighted is political interference. Under Ghana’s Constitution (Article 70) and the GRA Act, board members of the Ghana Revenue Authority are appointed by the President in consultation with the Council of State. This often results in appointments based on political loyalty rather than technical qualifications, a situation echoed across other African states.

“This undermines independence, reduces effectiveness, and opens the door to rent-seeking behaviours,” the study notes, citing similar inefficiencies in Nigeria and elsewhere.

To address these issues, Dr. Dr. Gbadago offers several practical recommendations:

  • Merit-Based Appointments: Require board members to have expertise in taxation, economics, finance, or law, with professional credentials such as chartered accountant or tax practitioner status.

  • Board Independence: Establish legal safeguards, minimum tenure policies, and reduced executive interference in board operations.

  • Diversity and Stakeholder Involvement: Promote gender, regional and sectoral diversity through quotas and consultations with SMEs, civil society, and private sector representatives.

  • Accountability and Oversight: Create independent review committees, mandate public performance disclosures, and conduct regular audits.

  • Continuous Capacity Building: Implement mandatory annual training for board members and foster cross-country knowledge exchange within Africa.

The paper also highlights research gaps in the field. While studies abound linking corporate governance to firm performance, few explore how tax board composition directly affects revenue performance. Dr. Dr. Gbadago urges more empirical studies, especially on how board expertise, diversity, and continuous training influence tax administration outcomes.

“The structure of tax authority governance boards is not a cosmetic issue—it’s fundamental to fiscal performance, economic growth, and public trust,” he asserts.

As Ghana and its peers seek to expand their fiscal space and fund development priorities, the paper notes that institutional reforms—starting with board governance—may hold the key to sustainable revenue growth and long-term economic stability.

Access the full article here.

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Tags: Dr. Frank Yao Gbadagoemerging economiesgoverning boardsTax-GDP ratio
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